You’ve earned a driver’s license and now it’s time to buy your first car. It’s exciting, isn’t it? You might agree, and you’d probably like to include the words ‘terrifying’ and ‘complicated’, because there are a lot of factors to consider. For instance, you have to budget effectively, ensure that you can get car loans and insurance in order, understand your transportation needs and actually choose a car. This isn’t something to walk into without preparation, so here’s a quick guide to buying your first car.
Look before You Leap: Assess your Wants and Needs
The first question you should ask yourself when looking for a new car is, ‘what is this car for?’ If you just need a vehicle that gets you from your home to your workplace, all that you really need are safety and fuel efficiency.
Once you’ve figured out your needs, you can start thinking about what you want in a car. If you value appearance and style, look for attractive cars that meet your needs. If you prefer handling, power, and quick acceleration, then check out some entry-level muscle cars like a Mustang. If you have no idea what you like in a car, go on a couple of test drives and see what appeals to you. Outlining your wants and needs in a car will narrow down your list of potential cars to something manageable so that you can start thinking about what you’ll actually end up buying.
Don’t Bite off More than You Can Chew: Budget is Everything
If you’re on a tight budget, as most first-time car buyers are, you probably can’t afford the absolute best car for whatever your needs are. You’ll have to make compromises and sacrifice quite a few of your wants in order to satisfy your needs. There are three big considerations in budgeting: how much you can spend up front, how much you can spend on operating costs, and how much you can borrow. It should go without saying that you shouldn’t spend a huge chunk of your savings up front on a car, so know how much you can afford to spend right away so that you can have an idea about how much you need to borrow.
Operating costs involve buying petrol, oil, and paying for registration and maintenance. These are regularly-occurring costs that you cannot avoid if you want your car to actually run and to do so legally. That’s why fuel efficiency and reliability are so important—the better your car is with these, the less you’ll spend on it.
Taking out a car loan is the third financial consideration, and the cost of the loan is probably going to be the most strongly limiting factor. Paying off interest and principal adds up, so budget carefully. If you want to know how much a specific loan plan will cost you, try our car loan calculator. Remember that if you’re on a strict budget, 360 Finance can help you get a low interest loan for the purchase of a used car. We don’t just deal in new car financing.
That’s it for our basic rundown on buying your first car. Hopefully, you feel much better prepared and more confident in your decision making. If you don’t know which car you might like, read our article, The Five Best Cars for Young People. It contains plenty of good suggestions.